Measures in the works for wealthy to "hand back" their children's allowance.

Sleepy · 15-08-2012 12:05pm

I have to say I actually like the idea of scrapping it entirely and having school uniforms, books, copies etc. even healthy packed lunches provided by the state.

It would give the department greater power to curb price gouging by publishers issuing "updated" versions of their textbooks every couple of years, power to leverage their then monopolistic buying power to get the best value from suppliers.

This is money that parents have to spend anyway so what they're currently spending on this stuff could be allocated towards necessities they may be currently relying on the children's benefit for.

Ideologically it also goes a little way towards balancing the playing field for schoolchildren which is something I'm keen on. As it stands the children of better off families are more likely to be better provided for in this manner than those from disadvantaged areas. I'm particularly thinking nutritionally here, if John is being fed a healthy diet and Mary is just getting whatever her parent(s) can afford (those on low budgets typically buying more higher processed, higher GI crap) John is more likely to have a decent attention span than Mary.

15-08-2012 12:16pm

Welease wrote: »

Your proposed solution is a good example of why this is more complicated than people believe (and it also worth nothing that no posters have any idea of the data structures or data held within the systems on which to base a solution)

I think this is missing the main point. The technicalities involved are not relevant to the overall discussion. I know enough about public sector data integration services to know that this is a complicated but feasible initiative that would take time, but would be doable. There are divisions of major multinationals in Ireland at the moment for whom this is bread and butter stuff. It's certainly not the lengthy impossibility that the minister is making it out to be, or more to the point, a justification for doing nothing and minimizing political risk while scores of millions of euros of taxpayer's money are wasted.

In my opinion, the minister is being duplicitous here. On one hand she is ostensibly supporting the change, so as not to bee seen as opposing it and standing in the way of progress, however she and her party colleagues are implicitly aware of the political minefield it could bring about, with dangers for their political popularity from many different camps, and so is hiding behind a vague statement like "such a system could take years to implement" in order to delay any proactive decision and perpetuate the wasteful, but politically relatively safe status quo.

To my mind it's more of the same cowardly, gutless politics which panders to various vested interests with large votes instead of having the courage to take a really progressive step. It's this kind of cowardly, self-serving politics which has our country so corrupt it's almost beyond saving.

BOHSBOHS · 15-08-2012 12:21pm

cut child benefit for 100k+ earners ?????
5.07% earn over 100k
105million gross saving
but will be less due to:
(a)manpower/admin cost of means testing 1,136,065 child benefit payments ? , people seem to be dismissing this cost ( DSP struggling as it is!)
(b) undeclaration of selfemployment income to go under 100k threshold ( and associated lost income tax revenue)
(c) strategic separations in order to go sub 100k

net savings would be hardly worth the effort

Farmer Pudsey · 15-08-2012 12:38pm

In GB they were considering the same thing that CB would be Means tested /taxed. They have given up on the Idea as it is virtually impossible to implement a fair system.

The issue with means testing/taxing is do you use one income or rwo. How do you access people who are living togeather but have seperate addresses and use them for tax porposes. A young couple PAYE on 110K/year, large mortage and creshe fees are they more in need than a two self employed who are showing an income of 90K small mortagage.

If implemented at 100K the amount saved will be a small and will effect PAYE earners more than any other sector. It will also allow a situtation to develop where some well off familys will be able to draw the benifit by being able to work around the conditions.

Most familys sort there money in different ways if you are a CS you may have deductions from salary that goes to saving/holiday money and use the CB to pay the ESB and school costs. If you are in the building industry and gettiong paid by cheque at the end of the week you may use the CB to save for that holiday but use the cheque to do day to day spending or if you are the couple in the first example above you may use the CB for that night one a month that you go out for a meal, a couple of drinks, taxi home and pay for the child minder. All the story's that are about the way CB is used is an urban myth to an extent.

On another note look at the way grants to 3rd level a little above 50K you get nothing, at 22K you get about 8.5K/child/year. Now take it that you have 2.4 kids to go to college for 4.5 years each over 10 years. That is equal to 9180/year. The family below 22K gets everything the the family above 50k get nothing who is the best off.

As an old friend of mine would say with a ciggerette in his mouth ''think about it''

antoobrien · 15-08-2012 1:10pm

BOHSBOHS wrote: »

cut child benefit for 100k+ earners ?????
5.07% earn over 100k
105million gross saving

Not to be sniffed at for something that's easily done.

BOHSBOHS wrote: »

but will be less due to:
(a)manpower/admin cost of means testing 1,136,065 child benefit payments ? , people seem to be dismissing this cost ( DSP struggling as it is!)

Everyone in the country has a PPS no, revenue & DSP already know about them and the relationships between the PPS nos, so it becomes an excercise in Data mining and analytics. Not a trivial one, but by no means overwhealmingly difficult.

BOHSBOHS wrote: »

(b) undeclaration of selfemployment income to go under 100k threshold ( and associated lost income tax revenue)
(c) strategic separations in order to go sub 100k

The vast majority of the PAYE net are employees, rather than being self employed. Strategic separations etc, hell if you read some of the other threads regarding SW we have that problem in spades with cohabiting single parents. Not a good enough reason not to do it.

BOHSBOHS wrote: »

net savings would be hardly worth the effort

The cost there will be mostly capital costs to set it up and train operators. After that it's just wages. A good government-wide IT system will pay for itself in savings in 2 years.

decmanning · 15-08-2012 1:43pm

"A young couple PAYE on 110K large mortage"
then dont take out a large mortgage, when i bought a house the banks were offering me massive mortgages but i knew if i ever got a cut in my wages then i would not be able to afford it so i chose a house with a price similar to my means, you cant expect the government to fork out for you just becasue you chose to buy a big house with a big price tag

monkeypants · 15-08-2012 1:51pm

bamboozle wrote: »

tax credit for parents with kids

This.

Also an incentive to work.

15-08-2012 4:35pm

antoobrien wrote: »

A good government-wide IT system will pay for itself in savings in 2 years.

Agree with this. A 3 to 5 year cost benefit analysis is about right for this kind of integration project in the private sector, but the average lifespan for a similar public sector project would be significantly longer. This would chug along in the DSP for years before it got an overhaul paid for by public money, and any costs incurred in managing it would be dwarfed by the savings made annually.

From an IT and services investment standpoint, it's a no brainer. You could realistically expect a system like this to be generating significant net returns for the taxpayer for at least 5 years after it reaches break-even. At least.

As has been posted already, the issue of the feasibility/complexity of the technology is a red herring here. All that's required is the political will to act.

Farmer Pudsey · 15-08-2012 6:29pm

decmanning wrote: »

"A young couple PAYE on 110K/year large mortage"
then dont take out a large mortgage, when i bought a house the banks were offering me massive mortgages but i knew if i ever got a cut in my wages then i would not be able to afford it so i chose a house with a price similar to my means, you cant expect the government to fork out for you just becasue you chose to buy a big house with a big price tag

I ment earning 110k per year and havein a large mortgage sorry about typo, and a lot of couples did not buy a large house the reality is that this couple will have creche fees and a montly mortgage repayment. I see where some posters are advocating a tax credit for childcare. All that will happen is that creche's will increase there fees in line with the tax relief. This happened when the house grants were first bought in and every thime they were raised. It also happened when Charlie McCreevy gave the 1000 euro allowance for toddlers. At present the economy is under pressure to keep couples like this in the labour force means testing/taxing CB will only increase the temptation to leave the workforce. The reality is that in the next Budget the government will again take 10-15 euro off CB. It is amazing we give free GP care, free travel, Free Tv licience etc to some very wealty pensioners, but middle income families have to pay for GP care, meadical, Education and un subsdised childcare for there childern and the reality is any money taken off CB will not be used to help fund any of these.

On another note CB also keeps the birthrate up this may hopefully keep the demigraphics that are begining to haunt some developed countries like Italy where the number of pensioners are begining to neary exceed the workforce,. These are the future taxpayers that mat pay your's ansd my Old Age pension.

Welease · 15-08-2012 8:27pm

Deleted User wrote: »

I think this is missing the main point. The technicalities involved are not relevant to the overall discussion. I know enough about public sector data integration services to know that this is a complicated but feasible initiative that would take time, but would be doable. There are divisions of major multinationals in Ireland at the moment for whom this is bread and butter stuff. It's certainly not the lengthy impossibility that the minister is making it out to be, or more to the point, a justification for doing nothing and minimizing political risk while scores of millions of euros of taxpayer's money are wasted.

In my opinion, the minister is being duplicitous here. On one hand she is ostensibly supporting the change, so as not to bee seen as opposing it and standing in the way of progress, however she and her party colleagues are implicitly aware of the political minefield it could bring about, with dangers for their political popularity from many different camps, and so is hiding behind a vague statement like "such a system could take years to implement" in order to delay any proactive decision and perpetuate the wasteful, but politically relatively safe status quo.

To my mind it's more of the same cowardly, gutless politics which panders to various vested interests with large votes instead of having the courage to take a really progressive step. It's this kind of cowardly, self-serving politics which has our country so corrupt it's almost beyond saving.

I think you have misread the context of my post. My post was a response to LeinsterDub's solution based on running a simple sql-type query.. I was merely pointing out that that such a simple solution didn't actually provide the required data due to the method of CB payment registration/payment and our methods of revenue collection..
To the wider point, its is obviously doable but statements such as it can be done in X are largely guestimates based on generally 0 knowledge of the process/data structures/data etc within the systems and therefore are essentially worthless.. If someone knows nothing about the internals of a system, then over 30 years of IT experience has taught me their estimates are probably wrong

I'm not going to get into where the fault lies, all the usual suspects will be involved (and I'm in general agreement with you there)

Welease · 15-08-2012 8:42pm

Deleted User wrote: »

Agree with this. A 3 to 5 year cost benefit analysis is about right for this kind of integration project in the private sector, but the average lifespan for a similar public sector project would be significantly longer. This would chug along in the DSP for years before it got an overhaul paid for by public money, and any costs incurred in managing it would be dwarfed by the savings made annually.

From an IT and services investment standpoint, it's a no brainer. You could realistically expect a system like this to be generating significant net returns for the taxpayer for at least 5 years after it reaches break-even. At least.

As has been posted already, the issue of the feasibility/complexity of the technology is a red herring here. All that's required is the political will to act.

I'm sorry, but post is borderline rediculous.. Can you show me any data points you have to the cost and/or benefits of a government linked IT system? and a breakeven in 3-5 years?

It's easy to come up with verbalised suggestions as to the benefits, they are obvious to anyone with a passing interest in IT, but for people to suggest cost vs. benefits in x numbers of years, would required a detailed understanding of the systems involved, the required system design, the process to get there, and detailed cost analysis of the modifications and the benefits of such modification.. As far as I am aware none of this actually exists for even linking SW to Revenue, so there is no way they can exist for a totally integrated system.

15-08-2012 9:12pm

Welease wrote: »

I'm sorry, but post is borderline rediculous.. Can you show me any data points you have to the cost and/or benefits of a government linked IT system? and a breakeven in 3-5 years?

No I can't, of course not. My post was a general impression of the complexity of a project based on the integration of two systems of a size typical to 2 key government departments in a country of approx 4.5 million people. It's just an estimation based on industry experience. Relax. For the final time, the technology is not the issue here, the lack of political will to act is where the problem is.

AlekSmart · 15-08-2012 9:47pm

My sense is of the entire Child Benefit issue being a bit of a Political Grandstand performance.

The statistics from 2011 appear to show the existing reductions had brought CB levels back to c 2006 totals.

http://www.welfare.ie/EN/Policy/ResearchSurveysAndStatistics/Documents/2011stats.pdf

Section F,pages 71 onwards give a somewhat clearer and dispassionate view of the issue.

It all appears to me a case of "But,Who'll look after the Children" scenario being played out with St Joan at the forefront..?

The sheer scale and depth of the Statistics in the report is scarifying for a bankrupt country ???

Cheerful Spring · 15-08-2012 9:56pm

How many wealthy people will be socially consciousness enough to hand back their children's allowance? I say good luck with that Joan Burton.

Welease · 15-08-2012 9:57pm

Deleted User wrote: »

No I can't, of course not. My post was a general impression of the complexity of a project based on the integration of two systems of a size typical to 2 key government departments in a country of approx 4.5 million people. It's just an estimation based on industry experience. Relax. For the final time, the technology is not the issue here, the lack of political will to act is where the problem is.

But thats the point (and I'm not trying to be disrepectful here).. You (and others) are making colossal assumptions based on close to zero knowledge of the systems involved... You are blaming political will, when those politicans have honestly stated (iirc) that they don't know the changes required yet, so can't commit to how long it would take or the cost involved.. While it's not the answer we need right now, it's an honest answer and forcing through "political will" without an understanding of the costs, benefits or technological requirements is exactly what caused the e-voting waste of money and various other political follies previously.

It's an assumption that we are talking about 2 "systems" here.. SW is a colossal department, do we even know that it's a single IT system?.. I would be amazed if it was.. Same again with Revenue... I doubt its a single system.. and I doubt just providing an interface will solve the issue, there may be masses of underlying process and data requirements that are as of yet unidentified and unfulfiulled.. For example, how are PPS numbers linked within the system? CB is paid and linked to my wife's PPS number but she doesnt work anymore.. All earnings are linked to my PPS number, the only linkage I am aware of is if I decide to utilise her tax allowances when processing my yearly return.. If I decide not to use her allowance, how do revenue know we are of linked income and process based on that? (as per my response to LeinsterDub).. Any change to that system to allow linkage now requires new processes when registering CB, tax, income etc. which now flows into multiple other systems and paper based forms within hospitals etc.. What if we split? Now new processes need to be in place to decouple earnings etc.
Before the recent Revenue changes to business allocated stock units etc. to employee's, companies would report stock allocations to Revenue (by law) but Revenue couldn't (or wouldn't) link them to employees tax returns so many people didn't bother to fill in the require tax forms (or pay the relevant tax).. So if Revenue don't even force collection of due taxes they are made aware of, then its somewhat safe to assume that the implementation of a multi PPS linked income system may be somewhat more complicated than the simple switch over many people are suggesting.

Yes something needs to be done, Yes it needs to be done sooner rather than later.. But anyone suggesting it will take x years and a cost benefit return is over x years.. is frankly talking absolutely <rudeword>.

relax carry on · 16-08-2012 1:03am

Revenue already receive information on certain payments from the DSP such as Jobseekers Benefit and Illness benefit which are linked to PPS numbers. More info on DSP payments like pensions have recently started to be shared. Is it that much of a leap to add in child benefit and tax it like the other payments by reducing credits and rate band?

Welease · 16-08-2012 6:56am

relax carry on wrote: »

Revenue already receive information on certain payments from the DSP such as Jobseekers Benefit and Illness benefit which are linked to PPS numbers. More info on DSP payments like pensions have recently started to be shared. Is it that much of a leap to add in child benefit and tax it like the other payments by reducing credits and rate band?

That is the answer that the bulk of people (incl. the government) appear to be waiting for..

antoobrien · 16-08-2012 10:30am

Welease wrote: »

I'm sorry, but post is borderline rediculous.. Can you show me any data points you have to the cost and/or benefits of a government linked IT system? and a breakeven in 3-5 years?

Actually that estimate is conservative. An analytics system (required to support a means test) will cost €5m-€10m to implement. The government when they wanted to restrict the medical card for wealthy over 70's (e.g. tony o'reilly) in 2008 they estimated savings of €100m for this one measure (even if that's 2/3 times inflated that's a good saving). A quick look at the income distribution stats tells us that 5% of the workforce (2.2m) earned 100k or more in 2009. If we carry out the suggestion to stop CB for these families, (5% of €2 bn) works out at up to €100m in savings.

These two measures would pay for a government wide IT system on their own in the 3-5 year timeline - just from purchasing and using an analytics system.

We can also look at the duplication of systems across the different departments. There are historical reasons for this, networks weren't great when departments started investing in IT stream so separate systems were more or less required. The savings would be made by moving duplicated HR, procurement and other back office systems to a single system (possibly even a cloud offering). Without knowing the details of licensing agreements and support deals it's hard to put a figure on something like this, so I'd be inclined to agree with the 3-5 year timeline for such a system paying for itself by reducing duplication of contracts, software and hardware.

Welease · 16-08-2012 12:08pm

antoobrien wrote: »

Actually that estimate is conservative. An analytics system (required to support a means test) will cost €5m-€10m to implement. The government when they wanted to restrict the medical card for wealthy over 70's (e.g. tony o'reilly) in 2008 they estimated savings of €100m for this one measure (even if that's 2/3 times inflated that's a good saving). A quick look at the income distribution stats tells us that 5% of the workforce (2.2m) earned 100k or more in 2009. If we carry out the suggestion to stop CB for these families, (5% of €2 bn) works out at up to €100m in savings.

How is linking to a story about means testing medical cards (with no costings suplied in the link) relevant to the Cost Benefit of means testing CB? Nowhere in that link is there a cost benefit of the system modifications required.
Once again, simplistic maths don't prove a point.. You are making the assumption that # of children eligible for CB is relative flat across the earning scale.. Do you have any figures to backup this analysis? Logic would argue that it would tend to be the more mature employees who would be earning at that level, and therefore a simple 5% cut may not apply given a good % of their children may be over the eligibility age.
No specific requirements for means testing have been decided upon, so therefore no specific costs can be determined.

Point being (again) picking figures out of the air to "prove" a point is exactly what people on this board complain about unions, politicians etc doing.. But seem happy to do so when it suits their arguement..

antoobrien wrote: »

These two measures would pay for a government wide IT system on their own in the 3-5 year timeline - just from purchasing and using an analytics system.

Measure and figures completely unrelated to and irrelevant to the discussion... Sorry, but if you want to claim that a cost benefit exists, then you need to provide costs and benefit analysis that has some basis in fact using at least relative data points.
Yes, I know we don't have that data.. But thats the issue at hand, and one that the relevant politicians are struggling with.

antoobrien wrote: »

We can also look at the duplication of systems across the different departments. There are historical reasons for this, networks weren't great when departments started investing in IT stream so separate systems were more or less required. The savings would be made by moving duplicated HR, procurement and other back office systems to a single system (possibly even a cloud offering). Without knowing the details of licensing agreements and support deals it's hard to put a figure on something like this, so I'd be inclined to agree with the 3-5 year timeline for such a system paying for itself by reducing duplication of contracts, software and hardware.

And here is the exact essence of the issue I have concerns with... You readily admit you don't know the details of the systems, licence, support agreements (and I could also assume the background processes, technologies, data etc etc etc..) but you can agree a 3-5 year timeline??

Fair play.. from a stated position of ignorance about the systems (like most here.. including me).. you can specify how long it would take to migrate across to a single system... If you cannot understand how ludicrous your statement is then I'm guessing you actually have little or no real IT experience in enterprise systems migration.

If you (or anyone) can actually provide details and costings to backup these claims of 3-5 year ROI then any rational person (including the government) would love to see them.. I'm guess that you don't actually have them though, becuase those in charge of those very systems don't seem to have them..

(Again, I'm not trying to be an arse here.. but some of the posts about costs/timelines are rediculous.. if a politician made decisions costing potentially hundreds of millions based on a hunch posters on here would want them hung, drawn and quartered... Yet posters on here demand the very same politicians spend money with no idea of the ROI... The relevant teams in the PS need to be given requirements, they need to perform a discovery exercise to understand, design and cost those requirements then and only then can a realistic Go/No Go decision be made on these changes). It is likely that considerable cost savings can and wil be made, but pretending to know how long it will take with 0 knowledge of the systems involved is beyond daft..

creedp · 17-08-2012 10:11am

monkeypants wrote: »

Doesn't means testing require a lot of admin? In which case, there'll be a huge cost. But still, it'll be more jobs in the public sector.

Means-testing is a great way for people to flex their mental muscles to come up with (or more to the point their financial advisors) novel ways to keep their incomes under the set thresholds, especially for those who are self-employed or who have 'multiple' sources of income, e.g. it never ceases to amaze me how self-employed people can benefit from 3rd level grants when they would appear not to 'need' them. As a matter of interest how often would people consider this means testing should occur - once at time of registering, every yeay, every 2 years?

Also if means-testing only works on the mother's income how will this be fair? If it works on both incomes of a couple then families of Ireland should just remain single parents. Why should a working couple with a relatively high gross income who have to shell out up to €20k a year on childcare lose child benefit while a stay at home mother whose husband/partner has a very good income keep it?

One thing sure though, it means-testing goes ahead there will still be people benefiting from it who don't 'need' it while plenty people who could be considered in 'need' of it will lose it.

As for this voluntary hand back of the CB - bloody madness!! Why don't we ask 'rich people' (yet tobe defined) to voluntary hand over a few extra bob in tax or donate a few bob to the Govt? Why focus on CB? Its great when this topics comes up people immediately focus on the Michael O'Leary's/Smurfitt's of this world - how many do these people represent? I'd love to know how much tax relief these guys benefit from in a year and compare that to the CB? I wonder do they 'need' all the other tax breaks they get? Utter tosh!

Stabshauptmann · 17-08-2012 9:24pm

It is my personal honest opinion that people should claim 100% of what they are entitled to.
My belief is that by not doing so the market / information available is distorted.

For example, I believe JSA is too high (I have a problem with JSA being the same as JSB, but thats a topic for another thread and will not reply to any rants) and the only way this is going to change is if everyone who is entitled to JSA claims it.
If the uptake isnt 100% the final "bill" wont reflect the true cost per person, it will be distorted downwards. I would prefer the full "bill", and people to realise that the payment is too high, and adjust it.

So, regarding voluntary hand backs. No. I have no problem loosing this payment if I were being treated the same as every other citizen. But I am not going to shoulder more than my fair share. Supporting the state (paying taxes) is not charity, it needs to be based on a system of equality.

Measures in the works for wealthy to "hand back" their children's allowance.

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